In patients and animals with diabetes lipid deposits have been found in the kidneys, which correlate with the presence of glomerulosclerosis and tubulointerstitial fibrosis, and progression of renal disease. In diabetic animals we also found presence of lipid deposits that are associated with increased expression of the transcriptional factors that regulate fatty acid synthesis, including SREBP-1 and LXR, and increased activity of enzymes that mediate fatty acid synthesis, including ACC and FAS. In glomerular and proximal tubular cells grown in culture we found that high glucose and saturated fatty acids stimulate the increased expression of SREBP-1. We also found that SREBP-1 transgenic mice have many of the manifestations of diabetic nephropathy, therefore indicating an important role for SREBP-1 in the pathogenesis of diabetic nephropathy. The specific aims of this proposal are: 1) To determine if compared to age- and sex-matched wild type mice the renal consequences of diabetes, including lipid accumulation, increased expression of growth factors (TGF-beta, VEGF, PAl-l), matrix proteins (collagen and fibronectin), glomerulosclerosis, tubulointerstitial fibrosis and proteinuria, are prevented or attenuated in a) SREBP-1 knockout or b) LXR knockout or c) ACC knockout mice made diabetic by i) administration of streptozotocin or ii) feeding a high fat diet. 2) In renal glomerular and proximal tubular cells grown in the presence of high glucose or saturated fatty acids to determine if conditional or inducible a) inhibition of SREBP-1 expression, or b) inhibition of LXR expression, or c) inhibition of ACC expression prevent or attenuate the accumulation of triglycerides and glycosphingolipids, increased expression of growth factors and cytokines, and increased expression of extracellular matrix proteins. 3) To determine if renal glomerular and/or proximal tubular specific knockout of SCAP (SREBP Cleavage Activating Protein), LXR or ACC, achieved by the LoxP-Cre approach, prevents the development and progression of diabetic renal disease in well established mouse models of type I diabetes and type II diabetes.